Beijing official’s proposal caused bitcoin price correction

After the Beijing cryptocurrency market began its recovery on May 20 and bitcoin was able to rise above $42,000, the number one cryptocurrency went down again in the second half of May 21, reaching the level of $37,000. At the same time, it had already managed to start rising in price again, rising to $37,56 thousand and then declining again to $36,600.

The cryptocurrency market was shaken up in May because the “Musk effect” played a significant role. Now the cryptocurrency market is trying to relate to what will happen in reality when it comes to Chinese Vice Premier Liu He’s proposal to seriously review the domestic regulation of digital assets in the Middle Kingdom with the potential to ban bitcoin mining.

The latter is a proposal worthy of special attention, although so far it appears to be only the opinion of one of the country’s officials. The ban on bitcoin sales and purchases introduced in 2017, as well as the recent confirmation by the People’s Bank of China that the No. 1 cryptocurrency cannot be used as a payment instrument in the Middle Kingdom, is something that has already been recouped by the cryptocurrency market in the prices of digital assets more than once.

The issue of mining cryptocurrencies in China is not yet considered from any new perspective. Beijing has been betting on “green energy” in recent years, and those companies that do not use most electricity generated by renewable energy sources have often been forced to shut down.

For example, dozens of large and successful pulp and paper companies in China have been shut down simply because they did not adjust to the environmental paradigm of the Chinese economy. Thus, mining companies are no exception: those enterprises that do not comply with Beijing’s environmental paradigm will be forcibly shut down, but in this case there is nothing fundamentally new in China’s policy regarding cryptocurrencies, at least for now.

Meanwhile, the repetition of the topic of restrictions on bitcoin circulation inside China (restrictions that already exist) is due to the fact that Beijing is conducting activities related to preparations for the large-scale launch of the digital yuan.